Friday, April 20, 2018

Balance Billing and Air Medical Transport

Bloggers note- Welcome to Week One of a Two-Part blog series focusing on Balance Billing and Air Medical Transport. This week we’ll look at the issue at hand complete with a brief history lesson on how we arrived at today and where things stand currently with regard to the practice. Next week, we’ll look at the public perception of the balance billing practice and even make some suggestions on how to navigate the changing balance billing climate. While this series focuses heavily on Air Medical Transport, there are definite takeaways for the ground ambulance sector, as well.

Billing Patients

Healthcare providers and suppliers have a long history of billing Patients for services. This process occurs in several different circumstances. It can be appropriate when the Patient does not have insurance coverage for the services that have been provided. It can be appropriate when the Patient has not yet met the deductible for their insurance coverage in a given period. It can be appropriate when the insurance coverage requires the Patient to be responsible for a predefined co-pay amount for the services provided. It may also be appropriate when the insurance company has paid an amount less than the provider/supplier’s CHARGES for the services provided. In the latter circumstance, the term of art for this process is called “balance billing.”

Balance Billing and Air Medical Transport

Balance Billing Defined

Healthcare providers are one of the few professional groups that have little to no control over their compensation. Unlike accountants, lawyers, consultants and other professional groups, healthcare providers/suppliers are frequently asked to accept compensation for services that has no relation to their actual charge for the services. In many cases, this determination is not made until AFTER the services have been rendered. It is quite common for the payors who are responsible for paying for services rendered to apply seemingly arbitrary standards to derive an amount they believe is appropriate payment for the services. This amount may be call an “allowable,” “usual and customary charges” or some other derivation; however, the outcome is the same… providers/suppliers are left with a shortfall between their charges and the amount they receive from the payor for the services provided.  Try that with your local plumber, your estate attorney or your accountant at tax time. I suspect the relationship will not be a longstanding one. Unfortunately, medical transport providers/suppliers are accustomed to operating with this burden.

When the provider/supplier is not obligated to accept the lower payment as payment in full, by regulation, contractual agreement or some other compelling circumstance, the entity may bill the Patient. The act of attempting to collect the difference between the CHARGES for the services rendered and the amount paid by the insurance company is called “Balance Billing”.

The Challenge of Balance Billing

This practice of Balance Billing in medical transport is often viewed in a different manner than our relationships with other professionals as noted above. This difference may result from several aspects of our situation. It is often difficult for us to provide a firm estimate of the charges in advance of the services being rendered. Whether it is because the situation requiring care is unfolding in an emergency circumstance and/or because the needs of the Patient are evolving as the care is provided, providing an estimate of the charges may not be practical. In addition, the financial responsibility for the services rendered are often detrimental to the Patient in economic terms. While Balance Billing for ground medical transport services may not be as onerous an economic burden, the order of magnitude for air medical transport is such that this financial responsibility is often much more catastrophic. Likewise, the perception of the value of the services provided can be very different than the charges for the service.

For  example, a quick review of air ambulance providers using this billing office finds the average Rotor Wing base rate charge to be in excess of $17,000, yielding an average charge per transport in above $25,000. Many large Rotor Wing providers are generating an average charge per transport of twice that much. The trend has included double digit increases in charges year over year. Not that it is easy to put a value on lifesaving services and care, but the reality is that many stakeholders have no concept of the COST of providing the services.

Friday, April 13, 2018

Medicare Prior Authorization- Part II- Impact!


Thanks for stopping by for Part II of our blog recap of the findings from the recently published interim evaluation report on Medicare Prior Authorization.

Medicare Prior Authorization- Part II- Impact!
Last week, we capsulized the findings as published by government contractor Mathematica Policy Research. This week, we will briefly take a look at the impact, now and for the future.

How’d we get here?

When Dutch Physician Willem Kolff created the “artificial kidney” dialyzer in 1943, he could have never foreseen the massive impact on the lives of patients around the globe. Even despite Nazi occupation of his homeland, Kolff pushed his invention forward after helplessly watching one of his patients suffer an agonizing death due to advance kidney failure.

Fast forward 19 years later to 1962 when University of Washington medical professor Dr. Belding Scribner found a way to bring dialysis treatments to the masses by developing the first-ever outpatient procedure.

Once this process was refined and the benefits to End Stage Renal Disease patients was proven, outpatient dialysis centers mushroomed from the hospital setting to locations dotted across the map over the next few decades.

With the growth of treatment possibilities, came the need for transport of patients to and from such treatments.

Big Bucks!

It didn’t take long for ambulance providers and suppliers to figure out that 6 transports per week per patient could compute to a nice predictable and steady cash flow.

That’s where the problem started.

To provide some context, we once had a for-profit ambulance proprietor tell us that it was a “no-brainer” for him to find as many dialysis patients that he could convince to use his service for transport because just 3 or 4 patients meant a revenue stream of six figures per year with relatively minimal effort and costs expended on his part to provide the service. And…the bulk of his revenue came from “guaranteed” (his words) government entitlement programs (ie. Medicare.)

And…he was right- at the time.

Then the ball dropped…

However, many of the RSNAT dialysis-trip ambulance providers were not the norm for the EMS industry. The ambulance operators were hastily organized, often did not follow medical necessity guidelines and in some cases fraudulently completed false documentation in order to justify payment from Medicare for these trips. These unscrupulous operators were “stealing from the government” to the tune of many millions of dollars and something had to be done.

The Medicare Prior Authorization program was designed as a way to combat this fraud and abuse of the system. In Year 1 of the Prior Authorization demonstration project, the Mathematica report showed a drop in RSNAT Medicare ambulance utilization by 65.78%, most of which represented transport of ESRD patients to and from dialysis.

When expenditures dropped for RSNAT per beneficiary by a whopping $432, a 90 percent decrease, so did the number of ambulance providers in the model States. In fact, average quarterly expenditures on all Medicare ambulance services per beneficiary with ESRD declined by $523 which in all translated to an approximate Medicare savings to the tune of $171 million.

The decline in the number of EMS agencies per 100,000, according to Mathematica, checked in at 38 per 100,000 Medicare beneficiaries down from 46 per 100,000 in 2012. In Year 2 of the project the drop dipped to 30 per 100,000 nationwide with the model states falling to 25 EMS agencies per 100,000.

The tension arising from the findings of the study, does make note that there was a spillover negative effect on legitimate ambulance providers and suppliers who were transporting truly medically-necessary patients to and from treatments. Additionally, the report noted a spike in the use of emergency ambulance services soon after program inception and while hard to extrapolate, there did seem to be a direct correlation between fewer transport options for patients who then extended their dialysis cycle to the point that their condition worsened and became emergent or they simply dialed 9-1-1 to request transport because they could find no other viable option once the smaller, dialysis-centric EMS agencies folded from the cash flow drain.

The decrease in the number of EMS agencies was even further magnified in Pennsylvania and New Jersey where, coupled with prior authorization; a moratorium on the credentialing of newly established non-emergency transport providers was put in place by CMS for the geographical area comprising the greater Philadelphia metropolitan area.

Change and Dialogue

This first report now begins a dialogue between the ambulance industry and Congress by way of CMS. A legislative roadblock has now been overcome allowing CMS to extend the program to the entire United States.

It will be interesting to see if that takes place in the days ahead.

Additionally, we now fully know that there was an over-utilization of services with some ambulance operators that were not totally playing by the rules. Using this report and further analysis, we all can come to a consensus on how to best legally use Medicare dollars wisely while still providing services to those patients who truly require RSNAT transportation.

Stay tuned!

Friday, April 6, 2018

Medicare Prior Authorization- Results 3 Years Later


In December 2014, the Centers for Medicare and Medicaid Services (CMS) implemented a Medicare Prior Authorization program on a three-year trial for RSNAT- repetitive, Scheduled, non-emergency ambulance transports. The program targeted three States that statistically showed a sharp increase in these types of transports at an alarming rate when compared with other states (ambulance usage approximately 50 percent higher.) The States included New Jersey, Pennsylvania and South Carolina.

Medicare Prior Authorization- Results 3 Years Later
Later in January 2016, Phase II of the trial driven by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) expanded the RSNAT prior authorization model to six additional states. Phase II states included Delaware, the District of Columbia, Maryland, North Carolina, Virginia and West Virginia.

As required under the program, CMS engaged Mathematica Policy Research, a nonpartisan think tank, to conduct a five-year evaluation to study the impact of the prior authorization model. Mathematica used guiding research questions across five “domain” areas- Cost Savings, Quality and Access, Program Operations, Suppliers and Providers and Improper Payment Rates. The report also capsulizes the implications of the findings and highlights the major lessons learned from the project.

Interestingly, but not surprising, the report wound up focusing heavily on End Stage Renal Disease (ESRD) patients who accounted for more than 75% of the repetitive transports reviewed. The transports of ESRD patients has long been the focus for CMS which has continually been questioning the medical necessity and reasonableness in justifying payments for those patient transports. The Feds even moved to combat the growth in ESRD slicing payments for those transports below the normal Medicare National Ambulance Fee Schedule allowances, twice, with the most recent cuts coming just this year.

The research project ended one month ago when Mathematica released its report titled First Interim Evaluation Reports of the Medicare Prior Authorization Model for Repetitive Scheduled Non-Emergent Ambulance Transport (RSNAT). The extensive report amasses just shy of 100 pages of findings and data to support those findings.

Cost Savings

Mathematica reports that the prior authorization program reduced Medicare payments for RSNAT service expenditures for ESRD beneficiaries by $171 million across the nine participating states. That is a decrease of at least 80 percent in service utilization and costs in those model states for ESRD beneficiaries.

The report cites that stakeholders in the program perceive that the prior authorization model is achieving success in addressing the fraud and abuse connected with these types of transports. The results appear to be significant enough that we can only deduce that the program will soon be expanded to include the entire United States, although no concrete plans have yet been announced for implementation. The reason for this delay was for the review of the impact report. Now that this report has been released, it would seem logical that CMS will recommend to Congress that the program be expanded to save resources and protect against improper payments.

Quality and Access

The report cites “little or no” impact on quality and/or adverse outcomes for ESRD beneficiaries backed up by studies of emergency department visit reviews, emergency ambulance utilization reviews as well as an analysis of unplanned inpatient admissions and even death. However, Mathematica’s research did find that there was a 15 percent spike in emergency dialysis use, suggesting a delay in ESRD treatment minus a transportation option for some of these patients.

Mathematica did find that there were some beneficiaries who qualify as medically necessary patients who experienced delays and/or missed treatments because of the time required for the ambulance to receive the prior authorization from the Medicare Administrative Contractors (MACs). Additionally, non-medically-necessary patients had trouble finding a transportation option to and from dialysis treatments because of the overall affect the program had on ambulance agencies in the nine program states.

Program Operations

It’s not a shock that the MACs reported successful implementation of the program overall. Why wouldn’t they say that? They are protecting their own skin in the game here (this blogger’s opinion, of course.)

Phase I or what the report calls “Year 1” states had a more difficult roll-out than “Year 2” affected MACs as the first phase MACs were creating a new program from scratch which is a logical explanation.

Suppliers and Providers

Big effect here!

The report documents a 15 percent decrease in the number of ambulance suppliers per 100,000 beneficiaries in the model states following the Prior Authorization Model implementation. It was noted that the suppliers that left the program were generally smaller companies that relied heavily on RSNAT transports for the bulk of their Medicare and overall operating revenue.

There were complaints recorded by stakeholders, most notably physicians, who claimed they received little or no advance notice or educational material regarding the prior authorization program implementation. These stakeholders indicated that the medical necessity determinations used to issue or deny the prior authorization were too strict and the medical necessity guidelines were not clear to the stakeholders, again primarily physicians, prior to the beginning of the trial program.

It appears that CMS and the MACs must still improve on their educational initiatives at all levels, not just for the ambulance industry participants.

Improper Payments Rates

Mathematica noted “data challenges” that made it difficult to properly assess whether the Prior Authorization model had an impact on improper payments. In fact, rates of improperly paid claims for all Medicare ambulance services actually increased during the analysis period.

However, it was noted that upon program model implementation the MACs issued denials more aggressively noting increased vigilance on the part of the MACs given their recognition of the program rollout.

Coming Next Week…

We’ll look at the report’s conclusions and possible implications next week in this space. We hope you’ll check back in again!

Friday, March 23, 2018

Other Methods of Transportation are Contraindicated

Medical Necessity Defined

We talk a lot about Medical Necessity in the ambulance billing office. Medical necessity and Reasonableness are key in determining whether or not an insurance payer is obligated to pay for ambulance transport, especially for Medicare and Medicaid patients.

Other Methods of Transportation are Contraindicated
Title XVIII of the Social Security Act defines the very Medicare ambulance benefit as “ambulance service where the use of other methods of transportation is contraindicated by the individual’s condition…”

The Social Security Act spells out that the deciding factor in allowing payment for all ambulance claims submitted for payment. Documentation explaining the ambulance transport must be clear making a case that the patient could not have been safely transported from origin to destination by any other means of transportation without jeopardizing the patient’s health.

Internal Guidance

Internal guidance released by the Centers for Medicare and Medicaid Services (CMS to the Medicare Administrative Contractors (MACs) provides guidance directing when to deny payment on ambulance claims.

CMS stresses that each individual’s medical condition must be explained using words that describe the patient’s “clinical medical necessity” leaving no doubt that the patient was unable to use another mode of transportation other than an ambulance.

CMS instructs, “It is important to understand that this clinical medical necessity aspect is a component of the definition of the benefit…”

A Benefit, Not a Right

Many of us in the ambulance industry look at Medicare, Medicaid and even Commercial Insurance coverage as somehow being our “right” to be paid just because we turned a wheel.

If we had a dollar for every time we have heard…
“If the patient calls 9-1-1, we must respond and we pretty much have to transport so we should be paid!”
Or, in the case of a non-emergency/routine transport…
“If the doctor believes that the patient needs to go by ambulance then who is Medicare to say that they shouldn’t pay? The doctor knows best. They call. We transport. They should pay!”
Unlike the basic rights and liberties that we enjoy as Americans, we hate to burst your bubble but universal coverage for ambulance transports is NOT a right. Insurance coverage is a benefit. But it is a benefit contingent on the patient’s meeting the stated criteria and that criteria boils down to one basic concept for most payers.

Transportation of the patient by any
other means is contraindicated!!!

Often Misunderstood

The concept of Medical Necessity is often very much misunderstood by the ambulance provider community. As providers, all of us are birthed in our careers by the notion that when the pager activates we have a duty to respond.

Likewise, we somehow extend that duty into the notion that the insurance payer (Medicare, Medicaid, Commercial…) must always pay.

Not so!

The phrase Medical Necessity is a two part concept that must be understood as…
  • Clinical- did the patient medically require an ambulance such that transport by ambulance was the only way to safely move the patient to a destination for the diagnosis or treatment of illness or injury or to improve the functioning of a body member?
  • Statutory- has the transport met the payment criteria outlined in the insurance payer’s rules defining the benefit?

There are no givens!

There are no givens in the ambulance billing industry. We must prove each claim using clear clinical documentation recorded by the patient care provider supporting the fact that the patient would have been endangered and literally had no other means of being transported from Point A to Point B safely except in an ambulance.

It’s the provider’s burden to explain in the Patient Care Report (PCR) that some form of diagnosis or treatment of an illness or injury to improve our patient’s qualify of life was performed during the ambulance transport in order for the payer to make payment for the transport.

In the end, ultimate medical necessity proof resides in the PCR which explains in detail the overall condition of the patient necessitating the level of service and care provided during the transport.